National Forms of Ownership

Question 1

Which of these terms refers to sole ownership by one person?

A)
Tenancy by the entirety
B)
Severalty
C)
Community property
D)
Tenancy in common

Answer 1

Which of these terms refers to sole ownership by one person?

A)
Tenancy by the entirety
Incorrect Answer
B)
Severalty
Correct Answer
C)
Community property
Incorrect Answer
D)
Tenancy in common
Incorrect Answer
Explanation
Severalty ownership is ownership by one person severed and cut off from all others. Tenancy in common and tenancy by the entirety are forms of joint ownership. Community property is personal or real property belonging to spouses according to state laws.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 2

An owner purchased an interest in a house in a resort beach community. The owner is entitled to the right of possession only between July 10 and August 4 of each year. Which type of ownership MOST likely has been purchased?

A)
Cooperative
B)
Trust
C)
Time-share
D)
Condominium

Answer 2

An owner purchased an interest in a house in a resort beach community. The owner is entitled to the right of possession only between July 10 and August 4 of each year. Which type of ownership MOST likely has been purchased?

A)
Cooperative
Incorrect Answer
B)
Trust
Incorrect Answer
C)
Time-share
Correct Answer
D)
Condominium
Incorrect Answer
Explanation
The owner holds an interest in property for a stated time each year, sharing the property according to a specified time plan. The owner’s interest is a time-share. The owner of a condominium or a cooperative has a right of possession for as long as the ownership is not transferred. An individual does not own property through a trust because a trust holds title to the real estate.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 3

To create joint tenancy in the ownership of real estate, there must be unities of

A)
grantees, ownership, claim of right, and possession.
B)
possession, interest, time, and title.
C)
title, interest, encumbrance, and survivorship.
D)
ownership, possession, heirs, and title.

Answer 3

To create joint tenancy in the ownership of real estate, there must be unities of

A)
grantees, ownership, claim of right, and possession.
Incorrect Answer
B)
possession, interest, time, and title.
Correct Answer
C)
title, interest, encumbrance, and survivorship.
Incorrect Answer
D)
ownership, possession, heirs, and title.
Incorrect Answer
Explanation
The equal interests of possession, interest, and title must all occur at the same time (PITT) for joint tenancy to be created.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 4

A property owner deeds a parcel of his property to a town “for recreational purposes only.” The deed conveys to the town

A)
a leasehold estate.
B)
a life estate.
C)
a fee simple absolute estate.
D)
a fee simple defeasible estate.

Answer 4

A property owner deeds a parcel of his property to a town “for recreational purposes only.” The deed conveys to the town

A)
a leasehold estate.
Incorrect Answer
B)
a life estate.
Incorrect Answer
C)
a fee simple absolute estate.
Incorrect Answer
D)
a fee simple defeasible estate.
Correct Answer
Explanation
The deed conveys a fee simple defeasible estate, which includes a specific condition on the use of the parcel. If the town uses the parcel for any purpose other than for recreational use, the property owner can take possession of the property through legal action. Holder of a leasehold estate has no ownership, only possession. A fee simple absolute estate has no restrictions on the use of the property. A life estate is limited in duration to the life of the owner of the estate or to the life of some other designated person.

Reference: Forms of Ownership > Freehold Estate

Question 5

Under the old common law, who could terminate an estate at will?

A)
The lessor and the lessee
B)
The devisor, but not the devisee
C)
The devisor and the devisee
D)
The lessor, but not the lessee

Answer 5

Under the old common law, who could terminate an estate at will?

A)
The lessor and the lessee
Correct Answer
B)
The devisor, but not the devisee
Incorrect Answer
C)
The devisor and the devisee
Incorrect Answer
D)
The lessor, but not the lessee
Incorrect Answer
Explanation
Under traditional common law rules, either the landlord (lessor) or the tenant (lessee) could terminate an estate at will at any time. An estate at will is a leasehold estate of possession. Note: Some states now either prohibit this type of leasehold estate or impose notice requirements for its termination. The legal document called a will sets forth how someone wants their assets distributed following death. A devisor is a person who is leaving real estate via a will. The devisee is the person who will inherit the real estate via a will, after the devisor dies.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 6

Does a holdover tenant have an estate in leasehold property after the lease is over?

A)
Yes, a freehold fee simple defeasible estate
B)
Yes, a freehold estate
C)
Yes, a less-than-freehold estate at sufferance
D)
No

Answer 6

Does a holdover tenant have an estate in leasehold property after the lease is over?

A)
Yes, a freehold fee simple defeasible estate
Incorrect Answer
B)
Yes, a freehold estate
Incorrect Answer
C)
Yes, a less-than-freehold estate at sufferance
Correct Answer
D)
No
Incorrect Answer
Explanation
A holdover tenant—still on the property after the lease is over—has a less-than-freehold estate at sufferance. This is the lowest estate in real property known under the law. A freehold estate in land is an estate of ownership. A fee simple defeasible estate is an estate of ownership where a violated condition might result in the loss of title to the property.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 7

A tenant is renting a residential apartment unit. The term is month to month. When the tenant pays the rent, the leasehold tenancy renews automatically. If either party wants to terminate the arrangement, advance notice must be given to the other party. Which of the following describes the lessee’s estate?

A)
An estate at sufferance
B)
A periodic tenancy
C)
A fee simple defeasible estate
D)
A leased fee estate

Answer 7

A tenant is renting a residential apartment unit. The term is month to month. When the tenant pays the rent, the leasehold tenancy renews automatically. If either party wants to terminate the arrangement, advance notice must be given to the other party. Which of the following describes the lessee’s estate?

A)
An estate at sufferance
Incorrect Answer
B)
A periodic tenancy
Correct Answer
C)
A fee simple defeasible estate
Incorrect Answer
D)
A leased fee estate
Incorrect Answer
Explanation
A nonfreehold estate is a leasehold estate of possession held by the tenant (the lessee). The fact pattern described here describes a nonfreehold periodic estate (a.k.a. a periodic tenancy). A leased fee estate is an estate of ownership held by the lessor (the landlord). A fee simple defeasible estate is an estate of ownership with a condition that, if violated, can result in a loss of ownership. A nonfreehold estate at sufferance describes the estate of a holdover tenant who stays on the property after the lease has terminated.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 8

A parcel of property was purchased by two friends. The deed they received from the seller at closing conveyed the property by name to each of the two friends, with equal shares and interest. Upon death of either owner, the interest and shares will automatically become those of the other co-owner. What form of title and ownership do the friends have?

A)
Tenants in common
B)
Tenants by the entirety
C)
Joint tenants
D)
Community property owners

Answer 8

A parcel of property was purchased by two friends. The deed they received from the seller at closing conveyed the property by name to each of the two friends, with equal shares and interest. Upon death of either owner, the interest and shares will automatically become those of the other co-owner. What form of title and ownership do the friends have?

A)
Tenants in common
Incorrect Answer
B)
Tenants by the entirety
Incorrect Answer
C)
Joint tenants
Correct Answer
D)
Community property owners
Incorrect Answer
Explanation
The deed clearly stated the requirements of joint tenancy—equal possession, interests, title all taken at the same time (PITT). Once this is established, the rights of survivorship are created. If joint tenancy is not clearly stated in the deed, grantees would take title as tenants in common. Friends are unable to hold community property or be tenants by the entirety because those forms of ownership are available only for married couples.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 9

A property owner conveys a life estate to her uncle and names her son as remainderman. On the death of the uncle, the son will have what type of estate?

A)
Remainder estate
B)
Fee simple absolute estate
C)
Qualified fee estate
D)
Reversionary estate

Answer 9

A property owner conveys a life estate to her uncle and names her son as remainderman. On the death of the uncle, the son will have what type of estate?

A)
Remainder estate
Incorrect Answer
B)
Fee simple absolute estate
Correct Answer
C)
Qualified fee estate
Incorrect Answer
D)
Reversionary estate
Incorrect Answer
Explanation
The son holds a remainder interest in the property and will have a fee simple absolute estate upon the death of the uncle, the life tenant. A qualified fee estate is limited by specific deed conditions created by the deed. A reversionary interest exists when a life estate will revert to the original owner at the death of the life estate owner or some other person. The son as the remainderman holds a remainder interest during the uncle’s life.

Reference: Forms of Ownership > Freehold Estate

Question 10

A buyer learns from his real estate professional that the ownership rights of the seller’s property will continue forever and that no other person claims to be the owner or has any ownership control over the property other than the seller. The buyer will have what type of estate upon closing?

A)
A fee simple absolute estate
B)
A leasehold estate
C)
A fee simple qualified fee estate
D)
A life estate

Answer 10

A buyer learns from his real estate professional that the ownership rights of the seller’s property will continue forever and that no other person claims to be the owner or has any ownership control over the property other than the seller. The buyer will have what type of estate upon closing?

A)
A fee simple absolute estate
Correct Answer
B)
A leasehold estate
Incorrect Answer
C)
A fee simple qualified fee estate
Incorrect Answer
D)
A life estate
Incorrect Answer
Explanation
Fee simple ownership is absolute ownership; the buyer has all rights to the property. A fee simple qualified fee estate exists when an estate is qualified by a special limitation and may end if the current owner fails to comply with the limitations set on the estate by the former owner. A leasehold estate is an estate of possession only by a tenant. A life estate is a freehold estate limited in duration to the life of the owner or to the life of some other designated person or persons.

Reference: Forms of Ownership > Freehold Estate

Question 11

A purchaser of real estate learns that his ownership rights could continue forever and that no other person claims to be the owner or has any ownership control over the property. This person owns

A)
a life estate.
B)
a qualified fee estate.
C)
a fee simple interest.
D)
a remainder interest.

Answer 11

A purchaser of real estate learns that his ownership rights could continue forever and that no other person claims to be the owner or has any ownership control over the property. This person owns

A)
a life estate.
Incorrect Answer
B)
a qualified fee estate.
Incorrect Answer
C)
a fee simple interest.
Correct Answer
D)
a remainder interest.
Incorrect Answer
Explanation
Fee simple is an absolute ownership, an inheritable interest “with no strings attached.” A life estate is a noninheritable freehold estate that ends with the death of the owner or the death of some other designated person. A remainder interest is tied to a life estate. A qualified fee estate exists as long as a determined use of the property continues.

Reference: Forms of Ownership > Freehold Estate

Question 12

Tenancy with survivorship means

A)
the tenancy interest will pass to the surviving tenants upon the death of a co-tenant.
B)
the tenancy interest will be inherited.
C)
the tenant’s heirs must sign a new deed.
D)
the surviving tenants must sign a new deed.

Answer 12

Tenancy with survivorship means

A)
the tenancy interest will pass to the surviving tenants upon the death of a co-tenant.
Correct Answer
B)
the tenancy interest will be inherited.
Incorrect Answer
C)
the tenant’s heirs must sign a new deed.
Incorrect Answer
D)
the surviving tenants must sign a new deed.
Incorrect Answer
Explanation
Tenancy with survivorship, joint tenancy, means that the entire ownership remains with the surviving joint tenant or tenants. In a tenancy in common, deceased tenants’ interests may be passed on to their heirs. Joint tenancy does not require a new deed upon the death of one of the tenants.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 13

The freehold estates of fee simple absolute, fee simple defeasible, and a life estate have all of the same attributes EXCEPT

A)
all owners may convey title via a will to their heirs.
B)
ownership of the estate is passed by a deed.
C)
owners have the right of possession, which can be conveyed to a tenant via a lease.
D)
all owners are obligated to pay the property expenses and taxes.

Answer 13

The freehold estates of fee simple absolute, fee simple defeasible, and a life estate have all of the same attributes EXCEPT

A)
all owners may convey title via a will to their heirs.
Correct Answer
B)
ownership of the estate is passed by a deed.
Incorrect Answer
C)
owners have the right of possession, which can be conveyed to a tenant via a lease.
Incorrect Answer
D)
all owners are obligated to pay the property expenses and taxes.
Incorrect Answer
Explanation
The owners of a life estate may not transfer their ownership after death because their ownership is limited to a lifetime. All freehold estates are created in the deed, and because the holders then own the property, they are obligated to pay the expenses and taxes. All owners may lease the property; a life tenant’s lease would last only as long as the life estate lasts.

Reference: Forms of Ownership > Freehold Estate

Question 14

A condominium form of ownership is officially established when

A)
the condominium owners’ association is established.
B)
the construction of the improvements is completed.
C)
the unit owners all file their documents in the public record.
D)
the developer records a declaration in the public record.

Answer 14

A condominium form of ownership is officially established when

A)
the condominium owners’ association is established.
Incorrect Answer
B)
the construction of the improvements is completed.
Incorrect Answer
C)
the unit owners all file their documents in the public record.
Incorrect Answer
D)
the developer records a declaration in the public record.
Correct Answer
Explanation
When a developer declares in the public record the existence of a condominium, the condominium is officially established. The declaration includes survey, legal description, bylaws, restrictive covenants, and architectural drawings. Construction of improvements, the establishment of an owners association, and the sale of individual units follow the establishment of the condominium.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 15

Four friends decide to purchase an investment property as co-owners and take title as joint tenants. All of these are true EXCEPT

A)
all four will enjoy equal rights of possession of the property.
B)
all four will acquire their interests at the same time.
C)
all four will have equal interests in the property.
D)
the four friends will each receive a separate deed for their share.

Answer 15

Four friends decide to purchase an investment property as co-owners and take title as joint tenants. All of these are true EXCEPT

A)
all four will enjoy equal rights of possession of the property.
Incorrect Answer
B)
all four will acquire their interests at the same time.
Incorrect Answer
C)
all four will have equal interests in the property.
Incorrect Answer
D)
the four friends will each receive a separate deed for their share.
Correct Answer
Explanation
All concurrent ownership is created by one deed, which will establish either joint tenancy or tenants in common. Additionally, joint tenancy requires that four unities must be present: possession, interest, title, and time (PITT).

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 16

A couple bought a retail building and took title as joint tenants. One woman died testate. The other woman now owns the store

A)
as a joint tenant with rights of survivorship.
B)
in severalty.
C)
as a tenant in common with the dead woman’s heirs.
D)
in trust.

Answer 16

A couple bought a retail building and took title as joint tenants. One woman died testate. The other woman now owns the store

A)
as a joint tenant with rights of survivorship.
Incorrect Answer
B)
in severalty.
Correct Answer
C)
as a tenant in common with the dead woman’s heirs.
Incorrect Answer
D)
in trust.
Incorrect Answer
Explanation
Joint tenancy includes the right to survivorship; upon death of a joint tenant, the ownership interest of that joint tenant passes to the remaining co-owner(s). In this case, the women took title as joint tenants, meaning that upon one’s death, there is only one owner who now owns the property in severalty. In a tenancy in common, the owners own an undivided fractional interest in the property and that interest is passed on according to the owner’s will, to heirs, or to a trust.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 17

A joint tenancy with right of survivorship is created

A)
automatically if a deed is signed by both spouses.
B)
automatically if the property is distributed to the surviving children.
C)
by presumption if another form of ownership is not described.
D)
by a deed.

Answer 17

A joint tenancy with right of survivorship is created

A)
automatically if a deed is signed by both spouses.
Incorrect Answer
B)
automatically if the property is distributed to the surviving children.
Incorrect Answer
C)
by presumption if another form of ownership is not described.
Incorrect Answer
D)
by a deed.
Correct Answer
Explanation
Joint tenancy, like all ownership, is not implied by law or through any action. All tenancy is created when the deed in conveyed to the grantee. To create joint tenancy, the deed must specifically identify the parties as joint tenants. When a deed does not indicate the form of tenancy and two or more people acquire title to property, the new owners are presumed to be tenants in common. Joint tenancy is the right to survivorship, so that when an owner dies, the interest transfers directly to the surviving cotenants, not heirs. Signature by spouses does not create joint tenancy.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 18

Lessor and lessee negotiated the terms of a lease for a commercial office building. Both parties agreed that the start of the lease would be June 1, 2015, and the termination date of the lease would be September 1, 2015. This estate of the lessee created by the lease was

A)
a freehold periodic tenancy.
B)
a less-than-freehold estate for years.
C)
a less-than-freehold periodic tenancy.
D)
a freehold estate.

Answer 18

Lessor and lessee negotiated the terms of a lease for a commercial office building. Both parties agreed that the start of the lease would be June 1, 2015, and the termination date of the lease would be September 1, 2015. This estate of the lessee created by the lease was

A)
a freehold periodic tenancy.
Incorrect Answer
B)
a less-than-freehold estate for years.
Correct Answer
C)
a less-than-freehold periodic tenancy.
Incorrect Answer
D)
a freehold estate.
Incorrect Answer
Explanation
A less-than-freehold estate is an estate of possession held by a tenant. Or, in other words, a less-than-freehold estate is the leasehold estate of the tenant renting real estate. An estate for years is a leasehold estate that has a predetermined start date and predetermined termination date. The length of time is irrelevant as long as there is a specific beginning and end date. A freehold estate is an estate of ownership: The test question is asking you to identify the estate held by the tenant. There is no freehold periodic tenancy. A less-than-freehold periodic tenancy is held by a tenant for successive periods of time, until either the landlord or the tenant gives proper notice to end the tenancy.

Note: A lessor is the technical term for landlord. A lessee is the technical term for tenant. Expect to see a lot of OR/EE terms on your exam (e.g., lessor/lessee, mortgagor/mortgagee, optionor/optionee, grantor/grantee, etc.). A good memory aid is the OR party gives and the EE party receives. The lessor gives the right to possess the leasehold property to the lessee. The lessee receives the right to possess the leasehold property from the lessor.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 19

A property owner conveys the ownership of his house to his mother and stipulates that on her death, ownership will revert to him. The interest the owner has in the property is

A)
a homestead estate.
B)
a reversionary interest.
C)
a qualified fee estate.
D)
a remainder interest.

Answer 19

A property owner conveys the ownership of his house to his mother and stipulates that on her death, ownership will revert to him. The interest the owner has in the property is

A)
a homestead estate.
Incorrect Answer
B)
a reversionary interest.
Correct Answer
C)
a qualified fee estate.
Incorrect Answer
D)
a remainder interest.
Incorrect Answer
Explanation
Until the mother dies, the son holds a reversionary interest. Upon death of the life tenant, the mother, the holder of the reversionary interest will return to having a fee simple absolute estate. A qualified fee estate is held as long as the owner maintains the deed condition. A homestead is protection for a primary property against certain creditors. A remainder interest belongs to a person named as a remainderman, the person—other than the creator of the estate—to whom the life estate will pass when the estate ends.

Reference: Forms of Ownership > Freehold Estate

Question 20

A married couple owns a farm together, with the right of survivorship. Their ownership is MOST likely

A)
community property.
B)
severalty ownership.
C)
a tenancy in common.
D)
a tenancy by the entirety.

Answer 20

A married couple owns a farm together, with the right of survivorship. Their ownership is MOST likely

A)
community property.
Incorrect Answer
B)
severalty ownership.
Incorrect Answer
C)
a tenancy in common.
Incorrect Answer
D)
a tenancy by the entirety.
Correct Answer
Explanation
A married couple, in certain states, may use a special form of co-ownership called tenancy by the entirety. Each spouse has an equal, undivided interest in the property, with the right of survivorship. Severalty ownership occurs when real estate is owned by one person only. Tenancy in common and community property forms of ownership do not include the right of survivorship.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 21

A parcel of property was purchased by two friends. The deed they received from the seller at closing conveyed the property by name to each of the two friends without further explanation. The friends took title as which of these?

A)
Community property owners
B)
Joint tenants
C)
Tenants by the entirety
D)
Tenants in common

Answer 21

A parcel of property was purchased by two friends. The deed they received from the seller at closing conveyed the property by name to each of the two friends without further explanation. The friends took title as which of these?

A)
Community property owners
Incorrect Answer
B)
Joint tenants
Incorrect Answer
C)
Tenants by the entirety
Incorrect Answer
D)
Tenants in common
Correct Answer
Explanation
When joint tenancy is not clearly stated in the deed, grantees take title as tenants in common—to avoid the results of accidental joint tenancy. Friends are unable to hold community property or be tenants by the entirety as those forms of ownership are available only for married couples.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 22

The major difference between joint tenancy and tenants in common is that

A)
joint tenants have equal rights of possession, which tenants in common do not.
B)
tenants in common have survivor rights for each owner.
C)
tenants in common owners have a separate legal title, which allows them to have divided interests.
D)
joint tenancy requires all ownership rights to be acquired at the same time.

Answer 22

The major difference between joint tenancy and tenants in common is that

A)
joint tenants have equal rights of possession, which tenants in common do not.
Incorrect Answer
B)
tenants in common have survivor rights for each owner.
Incorrect Answer
C)
tenants in common owners have a separate legal title, which allows them to have divided interests.
Incorrect Answer
D)
joint tenancy requires all ownership rights to be acquired at the same time.
Correct Answer
Explanation
Joint tenancy, which offers the right of survivorship, requires possession, equal interests, title all occur at the same time (PITT). Tenants in common owners have equal rights of possession but may have unequal rights of ownership. All owners, regardless of how ownership is taken, share one deed, which conveys legal title.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 23

The difference between a freehold and a leasehold estate is

A)
ownership versus the right to purchase.
B)
the right of survivorship for the tenant.
C)
who is obligated to pay the property expenses.
D)
ownership versus possession.

Answer 23

The difference between a freehold and a leasehold estate is

A)
ownership versus the right to purchase.
Incorrect Answer
B)
the right of survivorship for the tenant.
Incorrect Answer
C)
who is obligated to pay the property expenses.
Incorrect Answer
D)
ownership versus possession.
Correct Answer
Explanation
Freehold estates are estates of ownership, while in a leasehold estate, the property owner gives the tenant possession of the property. Tenants may agree to pay all the property expenses or share them with the owner, or the owner can pay them all. The right to purchase is not a requirement for leasehold, and there is no right of survivorship.

Reference: Forms of Ownership > Freehold Estate

Question 24

Which of these is TRUE of condominium ownership?

A)
The ownership of a unit cannot be willed.
B)
The common elements cannot be sold separately.
C)
The ownership of a unit cannot be mortgaged.
D)
The association pays the unit real estate taxes.

Answer 24

Which of these is TRUE of condominium ownership?

A)
The ownership of a unit cannot be willed.
Incorrect Answer
B)
The common elements cannot be sold separately.
Correct Answer
C)
The ownership of a unit cannot be mortgaged.
Incorrect Answer
D)
The association pays the unit real estate taxes.
Incorrect Answer
Explanation
Although an individual unit owner owns an interest in the common elements as a tenant in common, the common elements may not be sold separately by a unit owner; unit owners do not have the same right to partition that other tenants in common have. Individual owners pay the real estate taxes for their units. Condominium owners may will or mortgage their fee simple ownership in a condominium.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 25

In a limited partnership,

A)
the number of investors is limited to 10.
B)
investors may participate with only a small amount of capital but with unlimited liability.
C)
each limited partner is liable for no more than his investment.
D)
all the partners participate in running the business.

Answer 25

In a limited partnership,

A)
the number of investors is limited to 10.
Incorrect Answer
B)
investors may participate with only a small amount of capital but with unlimited liability.
Incorrect Answer
C)
each limited partner is liable for no more than his investment.
Correct Answer
D)
all the partners participate in running the business.
Incorrect Answer
Explanation
In a limited partnership, each limited partner can be held liable for losses only to the extent of his investment. There is no limitation on the number of investors in the partnership. The limited partners are not legally permitted to participate in the running of the business.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 26

A seller sold a buyer a single-family residence. The buyer’s estate was the highest form of ownership known under the law. After the close of escrow, the new owner rented out the single-family residence to a tenant. The lease was for one year, and one week after the termination of the lease, the tenant was still on the property without the permission of the new owner. What was the lessee’s estate in the property?

A)
Fee simple absolute
B)
An estate at sufferance
C)
Fee simple defeasible
D)
The lessee had no estate in the owner’s property

Answer 26

A seller sold a buyer a single-family residence. The buyer’s estate was the highest form of ownership known under the law. After the close of escrow, the new owner rented out the single-family residence to a tenant. The lease was for one year, and one week after the termination of the lease, the tenant was still on the property without the permission of the new owner. What was the lessee’s estate in the property?

A)
Fee simple absolute
Incorrect Answer
B)
An estate at sufferance
Correct Answer
C)
Fee simple defeasible
Incorrect Answer
D)
The lessee had no estate in the owner’s property
Incorrect Answer
Explanation
A tenant who stays past the end of the lease without the permission of the landlord has an estate called an estate at sufferance (a.k.a. a tenancy at sufferance). This person is called a holdover tenant. Remember the holder of an estate at sufferance is the tenant, the party suffering is the property owner (because the tenant stayed beyond the termination of the lease). There are three types of freehold estates of ownership: fee simple absolute, fee simple defeasible, and a life estate. The test question focuses on the estate held by the tenant, not the owner.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 27

Which of these about a condominium is FALSE?

A)
Each unit owner owns the common elements as tenants in common with all other unit owners.
B)
Each owner has a proprietary lease with the association for her own unit.
C)
Each owner receives a separate real estate tax statement.
D)
Each owner must carry her own property insurance.

Answer 27

Which of these about a condominium is FALSE?

A)
Each unit owner owns the common elements as tenants in common with all other unit owners.
Incorrect Answer
B)
Each owner has a proprietary lease with the association for her own unit.
Correct Answer
C)
Each owner receives a separate real estate tax statement.
Incorrect Answer
D)
Each owner must carry her own property insurance.
Incorrect Answer
Explanation
In a condominium, each owner has fee simple title to the unit. Owners of cooperatives have proprietary leases. In a condominium, each owner owns the common elements as tenants in common with all other unit owners. Each owner receives a separate real estate tax statement. Each owner of a condominium unit must carry her own property casualty insurance on the individual unit based on the condominium declaration. The association carries insurance for the common elements.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 28

A corporation takes title to real property

A)
as a trust.
B)
in severalty.
C)
as a partnership.
D)
as a joint tenancy.

Answer 28

A corporation takes title to real property

A)
as a trust.
Incorrect Answer
B)
in severalty.
Correct Answer
C)
as a partnership.
Incorrect Answer
D)
as a joint tenancy.
Incorrect Answer
Explanation
A corporation is legally treated as a single person and may own property in severalty. A corporation, though not human, is an artificial person in the eyes of the law. A corporation is not a partnership or a trust. It does not own property with the right of survivorship established through a joint tenancy.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 29

Which of these is NOT a form of co-ownership?

A)
Tenancy in common
B)
Tenancy by the entirety
C)
Community property
D)
Ownership in severalty

Answer 29

Which of these is NOT a form of co-ownership?

A)
Tenancy in common
Incorrect Answer
B)
Tenancy by the entirety
Incorrect Answer
C)
Community property
Incorrect Answer
D)
Ownership in severalty
Correct Answer
Explanation
Ownership in severalty occurs when a property is owned by one individual or corporation. In a tenancy in common, each cotenant owns an undivided fractional interest in a property. Tenancy by the entirety is a form of joint ownership by a married couple that allows the surviving spouse to acquire full ownership of the property upon the death of one of the spouses. Community property consists of personal and real property acquired by either spouse in a marriage and belonging to both parties to the marriage.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 30

Two men are co-owners in fee simple of a small office building. One of the men dies intestate and leaves nothing to be distributed to his heirs. The surviving owner is related to neither the deceased owner nor his creditor. What would explain how the surviving owner acquired the deceased owner’s interest in the office building?

A)
Remainder interests
B)
Reversionary rights
C)
Adverse possession
D)
Joint tenancy

Answer 30

Two men are co-owners in fee simple of a small office building. One of the men dies intestate and leaves nothing to be distributed to his heirs. The surviving owner is related to neither the deceased owner nor his creditor. What would explain how the surviving owner acquired the deceased owner’s interest in the office building?

A)
Remainder interests
Incorrect Answer
B)
Reversionary rights
Incorrect Answer
C)
Adverse possession
Incorrect Answer
D)
Joint tenancy
Correct Answer
Explanation
Upon the death of an owner in a joint tenancy, all remaining interests do not pass to the heirs of the deceased owner or according to the will but to the surviving joint tenant or tenants. Reversionary rights and remainder interests refer to the future right to an estate in real property. Adverse possession occurs when a person acquires title to another’s property by means of open, hostile, and continuous possession over time.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 31

The four unities of possession, interest, time, and title are associated with which of these?

A)
Joint tenancy
B)
Community property
C)
Tenants in common
D)
Severalty ownership

Answer 31

The four unities of possession, interest, time, and title are associated with which of these?

A)
Joint tenancy
Correct Answer
B)
Community property
Incorrect Answer
C)
Tenants in common
Incorrect Answer
D)
Severalty ownership
Incorrect Answer
Explanation
A joint tenancy can only be created by an intentional act and requires the four unities—equal possession, interest, and title which must all occur at the same time (PITT)—to be present. Severalty ownership is the sole possession of a property by one owner without a need for any unity of interests with other parties. Tenants in common have undivided fractional interests in a property and their fractional interests may be different. Community property is one of the ways married couples may own property together.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 32

A tenant who rents an apartment from the owner of the property holds

A)
an easement.
B)
a leasehold interest.
C)
a license.
D)
a freehold interest.

Answer 32

A tenant who rents an apartment from the owner of the property holds

A)
an easement.
Incorrect Answer
B)
a leasehold interest.
Correct Answer
C)
a license.
Incorrect Answer
D)
a freehold interest.
Incorrect Answer
Explanation
A leasehold interest is an estate of possession with limited duration. A person renting an apartment holds a leasehold interest. A license is a personal right that can be revoked and is not considered an interest in property. A freehold interest, unlike a leasehold interest, is ownership for an indeterminate period of time. An easement is the right to use the land of another person for a particular purpose, but it does not give the holder any ownership interest in the land.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 33

A homeowner may be allowed certain protection from the judgments of creditors as a result of a state’s

A)
prior appropriation rights.
B)
littoral rights.
C)
homestead rights.
D)
fee simple rights.

Answer 33

A homeowner may be allowed certain protection from the judgments of creditors as a result of a state’s

A)
prior appropriation rights.
Incorrect Answer
B)
littoral rights.
Incorrect Answer
C)
homestead rights.
Correct Answer
D)
fee simple rights.
Incorrect Answer
Explanation
A homestead is land that is owned and occupied as a family home. In many states, homestead rights protect or exempt a portion of the area or value of the land from judgments or debts. Littoral and prior appropriation rights, both water rights, are the rights of a homeowner to land bordering on the shore of a sea or ocean. Fee simple rights are tied to fee simple absolute ownership.

Reference: Forms of Ownership > Freehold Estate

Question 34

A property owner conveys a life estate to his brother for the brother’s lifetime and designates his cousin as the person to whom the property will pass when the life estate ends. When the brother dies, what happens to the property?

A)
The cousin automatically becomes the fee simple owner of the property.
B)
The property owner must designate a remainderman for the property.
C)
The property passes to the brother’s heirs.
D)
The property reverts to the original property owner.

Answer 34

A property owner conveys a life estate to his brother for the brother’s lifetime and designates his cousin as the person to whom the property will pass when the life estate ends. When the brother dies, what happens to the property?

A)
The cousin automatically becomes the fee simple owner of the property.
Correct Answer
B)
The property owner must designate a remainderman for the property.
Incorrect Answer
C)
The property passes to the brother’s heirs.
Incorrect Answer
D)
The property reverts to the original property owner.
Incorrect Answer
Explanation
The property owner named his cousin as the remainderman, the one to whom the property would pass upon the death of his brother. On his brother’s death, the life estate ends, and the property automatically passes to the cousin. If the property owner does not choose a remainderman when conveying the life estate to his brother, ownership reverts to the original property owner or to his heirs (or other individuals specified in the property owner’s will).

Reference: Forms of Ownership > Freehold Estate

Question 35

An owner has purchased a fee simple interest in a lakefront cottage along with 6% ownership of the parking lot, laundry room, and boathouse. What kind of ownership interest has the owner bought?

A)
Time-share estate
B)
Condominium unit
C)
Cooperative unit
D)
Leasehold interest

Answer 35

An owner has purchased a fee simple interest in a lakefront cottage along with 6% ownership of the parking lot, laundry room, and boathouse. What kind of ownership interest has the owner bought?

A)
Time-share estate
Incorrect Answer
B)
Condominium unit
Correct Answer
C)
Cooperative unit
Incorrect Answer
D)
Leasehold interest
Incorrect Answer
Explanation
Condominium owners have a fee simple interest in their property, along with an undivided interest in the common elements as a tenant in common of the condominium. In a time-share, the owners own a right of possession for a specified period of time, usually on a weekly basis. In a cooperative unit, the tenant-owners have a share in the cooperative and proprietary leases to their units.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 36

Two women own a property together. One dies and the other now owns the property with the co-owner’s heirs. The two women owned the property

A)
as joint tenants.
B)
as tenants in common.
C)
by entirety.
D)
as shareholders in their own corporation.

Answer 36

Two women own a property together. One dies and the other now owns the property with the co-owner’s heirs. The two women owned the property

A)
as joint tenants.
Incorrect Answer
B)
as tenants in common.
Correct Answer
C)
by entirety.
Incorrect Answer
D)
as shareholders in their own corporation.
Incorrect Answer
Explanation
Under tenancy in common, when a cotenant dies, the tenant’s undivided interest passes according to the will. In this case, either the deceased owner died intestate and the state law of decent gave her interest to her heirs, or she willed her undivided interest in the property to her heirs. In a joint tenancy, if one of the women died, the other would enjoy the right of survivorship and own the property in severalty. If the two original owners had formed a corporation to own the property, the death of one would not affect title to the property, which would belong to the corporation. Only married couples are allowed to own property as tenants by the entirety, and the question did not state the woman were married.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 37

In receiving a gift of a parcel of real estate, one of the two new owners was given an undivided 60% share, and the other received an undivided 40% share. They now hold title as

A)
cooperative owners.
B)
community property owners.
C)
joint tenants.
D)
tenants in common.

Answer 37

In receiving a gift of a parcel of real estate, one of the two new owners was given an undivided 60% share, and the other received an undivided 40% share. They now hold title as

A)
cooperative owners.
Incorrect Answer
B)
community property owners.
Incorrect Answer
C)
joint tenants.
Incorrect Answer
D)
tenants in common.
Correct Answer
Explanation
Tenants in common hold property with undivided fractional interests, and the shares do not have to be equal. In a joint tenancy, each owner holds equal shares and interests to the property. Community property consists of personal or real property acquired by either party in a marriage and belonging to both parties to the marriage. In a cooperative, owners own shares in a corporation, partnership, or trust, which owns a property, with each owner holding a proprietary lease and the right to occupy the unit.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 38

An owner held fee simple title to a vacant lot adjacent to a hospital. She decided to make the lot available to the hospital. Her attorney prepared a deed that conveyed ownership of the lot to the hospital “so long as it is used for medical purposes.” After the completion of the gift, the hospital will own

A)
a fee simple defeasible estate.
B)
a periodic tenancy.
C)
a life estate.
D)
a tenancy for years.

Answer 38

An owner held fee simple title to a vacant lot adjacent to a hospital. She decided to make the lot available to the hospital. Her attorney prepared a deed that conveyed ownership of the lot to the hospital “so long as it is used for medical purposes.” After the completion of the gift, the hospital will own

A)
a fee simple defeasible estate.
Correct Answer
B)
a periodic tenancy.
Incorrect Answer
C)
a life estate.
Incorrect Answer
D)
a tenancy for years.
Incorrect Answer
Explanation
A fee simple defeasible estate creates a limited use by a deed condition. The former owner retains reversionary interest in that the owner may reacquire full ownership if the hospital does not use the land for medical purposes. A life estate is a freehold estate that lasts as long as the life of the tenant. A tenancy for years is a leasehold estate that continues for a definite period of time, for years, months, even days. A periodic tenancy is a less-than-freehold estate that creates the right of possession of a property from year to year.

Reference: Forms of Ownership > Freehold Estate

Question 39

An owner conveys a life estate to her grandson and stipulates that on her death the estate will pass to her son-in-law. The son-in-law has

A)
a remainder interest.
B)
a reversionary interest.
C)
an estate for years.
D)
a legal life estate.

Answer 39

An owner conveys a life estate to her grandson and stipulates that on her death the estate will pass to her son-in-law. The son-in-law has

A)
a remainder interest.
Correct Answer
B)
a reversionary interest.
Incorrect Answer
C)
an estate for years.
Incorrect Answer
D)
a legal life estate.
Incorrect Answer
Explanation
The owner’s death will end the life estate conveyed to her grandson, which will then mean the holder of the remainder interest, the son-in-law, will have fee simple absolute ownership of the property. An estate for years is a leasehold estate that continues for any definite period. A legal life estate is a freehold estate created out of a provision.

Reference: Forms of Ownership > Freehold Estate

Question 40

An ownership interest that is based on occupancy during a specified period is

A)
a cooperative.
B)
a leasehold.
C)
a condominium.
D)
a time-share.

Answer 40

An ownership interest that is based on occupancy during a specified period is

A)
a cooperative.
Incorrect Answer
B)
a leasehold.
Incorrect Answer
C)
a condominium.
Incorrect Answer
D)
a time-share.
Correct Answer
Explanation
A real property interest with the right to use the facilities for a certain period is called a time-share. While a time-share may be sold as a leasehold or a freehold interest, time-share intervals are usually shorter intervals of time, typically weekly intervals. A leasehold interest occurs when a tenant leases a property from an owner but usually for an extended longer period of time (such as one year). A condominium owner holds a fee simple absolute ownership to the unit and owns the common elements as tenants in common with the other owners. In a cooperative, tenants own shares in a corporation, partnership, or trust that holds title to the building, with tenants having the right to occupy their own units but not having a deed.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 41

A person who owns one unit in a multiunit structure together with a specified undivided interest in the common elements as a tenant in common owns

A)
a time-share interest.
B)
a cooperative.
C)
a condominium.
D)
a share in a real estate investment trust.

Answer 41

A person who owns one unit in a multiunit structure together with a specified undivided interest in the common elements as a tenant in common owns

A)
a time-share interest.
Incorrect Answer
B)
a cooperative.
Incorrect Answer
C)
a condominium.
Correct Answer
D)
a share in a real estate investment trust.
Incorrect Answer
Explanation
A person who holds a fee simple title to a unit and a specified share of the undivided interest in the common elements as a tenant in common owns a condominium. In a real estate investment trust (REIT), investors own shares in an investment group fund but not in an individual property. In a cooperative, tenants own shares in a corporation, partnership, or trust that holds title to the building, with tenants having the right to occupy their own units. A time-share is a real property interest with the right to use the facilities for a specified period of time (usually a week).

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 42

Who holds the leased fee estate?

A)
The lessee
B)
The lessor and the lessee
C)
The lessor or the lessee
D)
The lessor

Answer 42

Who holds the leased fee estate?

A)
The lessee
Incorrect Answer
B)
The lessor and the lessee
Incorrect Answer
C)
The lessor or the lessee
Incorrect Answer
D)
The lessor
Correct Answer
Explanation
A fee estate is an estate of ownership. The owner of the leased property holds a leased fee estate. The right of possession will revert from the lessee (the tenant) to the lessor (landlord) when the lease is over.

Reference: Forms of Ownership > Leasehold Estates/Leases

Question 43

A property owner conveys a life estate to his cousin for the duration of the life of the cousin’s grandfather. If the cousin were to die before his grandfather, how long may his heirs have possession of the property?

A)
For as long as determined by a probate court
B)
Until the property owner dies
C)
Until the grandfather dies
D)
For as long as specified in the deed

Answer 43

A property owner conveys a life estate to his cousin for the duration of the life of the cousin’s grandfather. If the cousin were to die before his grandfather, how long may his heirs have possession of the property?

A)
For as long as determined by a probate court
Incorrect Answer
B)
Until the property owner dies
Incorrect Answer
C)
Until the grandfather dies
Correct Answer
D)
For as long as specified in the deed
Incorrect Answer
Explanation
The cousin’s life estate is a life estate pur autre vie, a life estate based on the lifetime of another person, his grandfather. The cousin’s heirs may possess the property until the grandfather dies. On the grandfather’s death, the life estate ends.

Reference: Forms of Ownership > Freehold Estate

Question 44

A life estate conveys to the life tenant

A)
a periodic tenancy.
B)
a reversionary interest.
C)
a legal life estate.
D)
ownership for life.

Answer 44

A life estate conveys to the life tenant

A)
a periodic tenancy.
Incorrect Answer
B)
a reversionary interest.
Incorrect Answer
C)
a legal life estate.
Incorrect Answer
D)
ownership for life.
Correct Answer
Explanation
A conventional life estate is a freehold estate that lasts as long as the life of the life tenant. A conventional life estate occurs by a voluntary agreement of two parties. A legal life estate arises out of law, such as a spouse’s dowry rights when the other spouse dies. A periodic tenancy is a less-than-freehold estate that creates the right of possession of a property from year to year. A reversionary interest exists when the creator of a life estate reserves for himself a fee simple estate once a life estate ends.

Reference: Forms of Ownership > Freehold Estate

Question 45

When property is owned in severalty,

A)
the property owner may sell, will, or lease the property to another person.
B)
the owner cannot be a corporation.
C)
the property may be owned by more than one person.
D)
the property may not be owned by spouses.

Answer 45

When property is owned in severalty,

A)
the property owner may sell, will, or lease the property to another person.
Correct Answer
B)
the owner cannot be a corporation.
Incorrect Answer
C)
the property may be owned by more than one person.
Incorrect Answer
D)
the property may not be owned by spouses.
Incorrect Answer
Explanation
Property owned in severalty is owned by one person. The owner may be an individual or a corporation and has sole discretion to transfer the use or ownership of the property to another person. Spouses may own separate property in severalty.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 46

The holder of a reversionary interest in a qualified fee estate might be able to obtain title to the property

A)
if the holder of the qualified fee estate breaks the deed condition.
B)
if the holder of the qualified fee estate sells the property.
C)
only if the remainderman died first.
D)
if the conditions changed and the owner was unable to meet the requirements.

Answer 46

The holder of a reversionary interest in a qualified fee estate might be able to obtain title to the property

A)
if the holder of the qualified fee estate breaks the deed condition.
Correct Answer
B)
if the holder of the qualified fee estate sells the property.
Incorrect Answer
C)
only if the remainderman died first.
Incorrect Answer
D)
if the conditions changed and the owner was unable to meet the requirements.
Incorrect Answer
Explanation
The holder of a reversionary interest retains the right to repossess a property if a deed condition is not met or broken. If the condition is broken, the holder of the reversionary interest can go to court to try and obtain ownership of the property. If a remainderman dies, the remainder interest in a life estate passes to the heirs. The holder of a reversionary interest does not have the right to change the conditions of a qualified fee estate. A holder of a qualified fee estate may sell the property so long as the conditions or limitations of the qualified fee estate continue.

Reference: Forms of Ownership > Freehold Estate

Question 47

Because a couple no longer needs their large house, they decide to sell it and move into a cooperative apartment building. In a cooperative, they will

A)
own and finance their individual apartment.
B)
have fee simple title to unit.
C)
receive a 20-year lease to their apartment.
D)
become shareholders in a corporation.

Answer 47

Because a couple no longer needs their large house, they decide to sell it and move into a cooperative apartment building. In a cooperative, they will

A)
own and finance their individual apartment.
Incorrect Answer
B)
have fee simple title to unit.
Incorrect Answer
C)
receive a 20-year lease to their apartment.
Incorrect Answer
D)
become shareholders in a corporation.
Correct Answer
Explanation
In a cooperative, a corporation holds title to the land and building and offers shares of stock to inhabitants of the cooperative’s units. Owners in a cooperative occupy their units through proprietary leases, and their interests are treated as personal property. If the couple were to move to a condominium complex, they would own and finance their individual unit. Condominium ownership provides fee simple title to each individual unit, while a cooperative is ownership in the corporation, which owns the property.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 48

A property is owned by three cousins as tenants in common. If one of the cousins dies without a will, to whom will his interest pass?

A)
The deceased cousin’s heirs
B)
The other two cousins equally
C)
The state, by the law of escheat
D)
The other two cousins in joint tenancy

Answer 48

A property is owned by three cousins as tenants in common. If one of the cousins dies without a will, to whom will his interest pass?

A)
The deceased cousin’s heirs
Correct Answer
B)
The other two cousins equally
Incorrect Answer
C)
The state, by the law of escheat
Incorrect Answer
D)
The other two cousins in joint tenancy
Incorrect Answer
Explanation
Death of a tenant in common would usually cause property to pass according to the decedent’s will. Because the cousin died with no will, his property will pass to those persons identified in his state’s laws of descent as heirs. The property would not pass to the state. The other two cousins will retain their own fractional interests in the property and remain tenants in common with the deceased cousin’s heirs.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 49

Which of these BEST describes a fee simple absolute estate?

A)
It is the maximum estate in land but lasts only for the duration of the property ownership.
B)
It is the maximum estate in land and lasts forever.
C)
The duration is dependent on the language of the deed.
D)
It will have the maximum rights unless a deed condition exists.

Answer 49

Which of these BEST describes a fee simple absolute estate?

A)
It is the maximum estate in land but lasts only for the duration of the property ownership.
Incorrect Answer
B)
It is the maximum estate in land and lasts forever.
Correct Answer
C)
The duration is dependent on the language of the deed.
Incorrect Answer
D)
It will have the maximum rights unless a deed condition exists.
Incorrect Answer
Explanation
Fee simple absolute estates, which have the largest (maximum) bundle of rights, are typically transferred from one owner to another when title is passed, so they continue on forever. A deed condition would create a fee simple defeasible or qualified estate.

Reference: Forms of Ownership > Freehold Estate

Question 50

A person who has complete control of a parcel of real estate is said to own

A)
a fee simple estate.
B)
a leasehold estate.
C)
a defeasible fee estate.
D)
a life estate.

Answer 50

A person who has complete control of a parcel of real estate is said to own

A)
a fee simple estate.
Correct Answer
B)
a leasehold estate.
Incorrect Answer
C)
a defeasible fee estate.
Incorrect Answer
D)
a life estate.
Incorrect Answer
Explanation
The highest interest in real estate recognized by law is the fee simple or fee simple absolute estate, in which the holder is entitled to all rights of the property. In a fee simple estate, the property may pass to the owner’s heirs upon the death of its owner. A tenant’s right to possess a property for the term of a lease is called a leasehold estate. A life estate is an interest in real property that ends when the owner dies. A defeasible fee estate is a fee simple estate that can exist as long as a certain use continues or provided that the property is used for a specific purpose.

Reference: Forms of Ownership > Freehold Estate

Question 51

In a joint tenancy, all of these are true EXCEPT

A)
a couple who is not married may hold title as joint tenants.
B)
joint tenants have a right of survivorship upon the death of a tenant.
C)
each partner has a divided share of the property.
D)
unities of possession, interest, time, and title must be present.

Answer 51

In a joint tenancy, all of these are true EXCEPT

A)
a couple who is not married may hold title as joint tenants.
Incorrect Answer
B)
joint tenants have a right of survivorship upon the death of a tenant.
Incorrect Answer
C)
each partner has a divided share of the property.
Correct Answer
D)
unities of possession, interest, time, and title must be present.
Incorrect Answer
Explanation
Each partner has an undivided share in the property, which gives all owners equal rights of possession. To create a joint tenancy, the unities of possession, interest, time, and title must be present. Upon the death of one joint tenant, that interest in the property is extinguished, and the other tenants hold title as the remaining joint tenants. Marriage is not a requirement of joint tenancy.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 52

Three friends were concurrent owners of a parcel of real estate. One of the friends died, and his interest passed according to his will to become part of his estate. The deceased friend was

A)
a tenant by the entirety.
B)
a joint tenant.
C)
a severalty owner.
D)
a tenant in common.

Answer 52

Three friends were concurrent owners of a parcel of real estate. One of the friends died, and his interest passed according to his will to become part of his estate. The deceased friend was

A)
a tenant by the entirety.
Incorrect Answer
B)
a joint tenant.
Incorrect Answer
C)
a severalty owner.
Incorrect Answer
D)
a tenant in common.
Correct Answer
Explanation
In a tenancy in common, the property of a deceased owner may pass to the heirs according to the will. If the deceased owner had been a joint tenant, the property would not have passed according to the will because in a joint tenancy, the property interests would have transferred directly to the other two friends (cotenants). The deceased owner was not a tenant by the entirety, a category reserved for married couples. Nor was the deceased owner a severalty owner because that form of ownership requires property to be held by only one person.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 53

The owner of a unit in a cooperative receives

A)
a fee-simple interest in the unit.
B)
a right of first refusal.
C)
a tax bill for the individual unit.
D)
a proprietary lease to the unit.

Answer 53

The owner of a unit in a cooperative receives

A)
a fee-simple interest in the unit.
Incorrect Answer
B)
a right of first refusal.
Incorrect Answer
C)
a tax bill for the individual unit.
Incorrect Answer
D)
a proprietary lease to the unit.
Correct Answer
Explanation
In a cooperative, each tenant-owner receives shares in the cooperative and a proprietary lease to the owner’s unit for the life of the cooperative. Cooperative owners do not own real estate and do not have fee simple interest in their units. Cooperative owners pay their portion of taxes assessed on the cooperative. A right of first refusal refers to the right of a person to have the first opportunity to lease or purchase real property. Cooperative owners own their shares as personal property.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 54

When defining ownership estates, the term estate refers to

A)
residential properties over 25 acres.
B)
a person’s legal rights in the land or property.
C)
only the possessionary rights of tenants and owners.
D)
the quantity of land as shown on a plat map for a property.

Answer 54

When defining ownership estates, the term estate refers to

A)
residential properties over 25 acres.
Incorrect Answer
B)
a person’s legal rights in the land or property.
Correct Answer
C)
only the possessionary rights of tenants and owners.
Incorrect Answer
D)
the quantity of land as shown on a plat map for a property.
Incorrect Answer
Explanation
With respect to property ownership, the word estate refers to a person’s legal use or the bundle of rights in land, which, depending upon the type of estate, include the right to possess, transfer, encumber, et cetera. Estates are not tied to the physical quantity or the value of the land itself. A fee simple estate is the highest estate one can hold in land because it has the most or maximum rights to the land.

Reference: Forms of Ownership > Freehold Estate

Question 55

The type of real estate ownership that is MOST all-inclusive is

A)
a reversionary interest.
B)
a qualified fee estate.
C)
a fee simple absolute estate.
D)
life estate.

Answer 55

The type of real estate ownership that is MOST all-inclusive is

A)
a reversionary interest.
Incorrect Answer
B)
a qualified fee estate.
Incorrect Answer
C)
a fee simple absolute estate.
Correct Answer
D)
life estate.
Incorrect Answer
Explanation
A fee simple absolute estate is the highest interest in real estate recognized by law. Fee simple ownership is absolute ownership in which the holder is entitled to all rights to the property. A life estate is a freehold estate that lasts as long as the life of the life tenant. A qualified fee estate is limited by specific conditions created by agreement or by law. A reversionary interest is that interest in property that exists when ownership of a life estate reverts back to the original owner at the end of the life estate.

Reference: Forms of Ownership > Freehold Estate

Question 56

A woman owns one of 20 town houses in a new development in fee simple, along with a 5% ownership share in the parking facilities, recreation center, and grounds. What type of property does she own?

A)
Cooperative
B)
Land trust
C)
Time-share
D)
Condominium

Answer 56

A woman owns one of 20 town houses in a new development in fee simple, along with a 5% ownership share in the parking facilities, recreation center, and grounds. What type of property does she own?

A)
Cooperative
Incorrect Answer
B)
Land trust
Incorrect Answer
C)
Time-share
Incorrect Answer
D)
Condominium
Correct Answer
Explanation
When a person owns a unit in fee simple and a percentage of the rest of the development in common with the other unit owners, he holds ownership to a condominium. In a cooperative, a person does not own in fee simple but holds a proprietary lease on a unit and shares of stock in the cooperative corporation. A time-share is a real property interest with the right to use the facilities for a specified period (usually a week). In a land trust, title to real estate is conveyed to a trustee while a beneficiary retains management and control of the property.

Reference: Forms of Ownership > Sole Versus Concurrent Ownership

Question 57

A woman grants a parcel of land to a religious organization for as long as the parcel is used for religious purposes. The religious organization’s ownership rights to the parcel constitute

A)
a life estate.
B)
a fee simple defeasible estate.
C)
a fee simple absolute estate.
D)
a leasehold estate.

Answer 57

A woman grants a parcel of land to a religious organization for as long as the parcel is used for religious purposes. The religious organization’s ownership rights to the parcel constitute

A)
a life estate.
Incorrect Answer
B)
a fee simple defeasible estate.
Correct Answer
C)
a fee simple absolute estate.
Incorrect Answer
D)
a leasehold estate.
Incorrect Answer
Explanation
The religious organization’s ownership of the land is qualified by the limitation that the land be used for religious purposes. The limitation creates a fee simple defeasible or qualified fee estate. If the religious organization decides to use the property for some other purpose, title to the property may revert back to the woman or her heirs. A fee simple absolute estate is the highest form of real estate ownership. A life estate is limited to the life of the estate owner or some other designated person. A leasehold estate is an estate of possession only granted from the property owner to a tenant and lasts for a fixed period.

Reference: Forms of Ownership > Freehold Estate